Bangladesh Stock Exchange Votes to Sell Stake to China Peers
Bangladesh's main stock exchange has decided to sell 25% of itself to peers from China, evoking protest from a rival bidder in neighboring India which warned of political agendas from Beijing.
The board of the Dhaka Stock Exchange (DSE) voted unanimously to sell the stake, equal to 450 million shares, to a consortium of China’s two main stock exchanges in Shanghai and Shenzhen, Managing Director K.A.M. Majedur Rahman said at a briefing on Monday, according to the English-language Dhaka Tribune.
The pair had offered to pay 22 taka ($0.26) per share, making the stake worth about $119 million. As part of the deal, the pair also requested a seat on the exchange’s board. The proposal will now be placed before the Bangladeshi securities regulator for approval within a day or two, Rahman said.
The Chinese buyer beat out India’s National Stock Exchange, which had offered a much lower 15 taka per share and wanted two seats on the DSE board.
Apart from offering a lower offer price, the Indian bidder also failed to show whether it had received approval from the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India, which are necessary to transfer funds to Bangladesh, the Tribune said, citing a source at DSE.
Following its failed bid, the Indian bourse is now lobbying Bangladeshi regulators to persuade the DSE to reconsider its decision, arguing that China wants to use the investment to further its growing political power in South Asia, the Financial Times reported.
“We have accepted the Chinese bid, but the Indians are lobbying our regulator very hard,” one member of the DSE told the Financial Times. “The issue seems to have become as much political as financial.”
India’s protests mark its latest recent move to try to contain China’s growing global influence. The South Asian country is reportedly in talks with the United States, Australia and Japan to form a joint regional infrastructure-building initiative, attempting to counter a similar Beijing-led Belt and Road Initiative that aims to boost developing market economies.
India and China have also clashed over their common border, as well as over the influence they wield in neighboring countries sandwiched between the pair. Last year troops from the two sides got into a months-long standoff over a road that China was building in area claimed by both China and the small nation of Bhutan, which has traditionally had a close relationship with India.
Contact reporter Coco Feng (firstname.lastname@example.org)
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